A new white paper from Roseland-based Automatic Data Processing aims to offer guidance to employers with questions on purchasing health care coverage for their employers in 2014, with Affordable Care Act mandates in place.
According to the paper, produced by ADP's research institute, employers can use employee income as a way to determine which workers would be more likely to get coverage through an employer's group plan, and who would be better served on public exchanges.
According to ADP's research, 81 percent of single people earning $45,000 or more — or 400 percent of the federal poverty level and above — purchase health insurance through their employer's group plan. Below $45,000, participation rates dropped rapidly; 37 percent of people making between $15,000 and $20,000 participated in group plans.
The research also shows 8.6 percent of single employees pay more than 9.5 percent of their income towards health insurance premiums, which will be considered unaffordable under the ACA, and could be penalized. The report said similar ratios occur in married couples, as well.
Christopher Ryan, vice president of the company's strategic advisory services group and co-author of the paper, said he hopes the information in the white paper will lead employers — both large and small — to rethink their human capital strategy.
"What employers need now more than anything else is cool-headed, objective data to make decisions," Ryan said. "It's time for us to use empirical data and think through what we are going to do with these issues."
Ryan said employers can take the research done by ADP and break their own work force into similar categories: who will be newly eligible for insurance, who is paying more than 9.5 percent of income toward premiums and who is most likely to join an employer-sponsored plan.
That information can then lead employers to determine what kind of insurance to offer, and what kind of penalties they may face from the government.
A large population of employees who may drastically affect health care spending — and penalties — in 2014 are part-time employees who work more than 30 hours a week. Their new eligibility in particular will affect industries like retail, hospitality, construction and long-term care.
In addition to cost management, Ryan said, figuring out the best plan for health care reform implementation also will require looking at recruitment and retention goals, funding, administration of compliance reports and communication with employees.
Given the costs of living in New Jersey, Ryan said, benefits are more important to recruiting talent here than in places with more moderate costs. And while the report uses data collected from ADP clients with more than 1,000 employees, concepts like communication and encouraging employee engagement translate to all businesses, no matter how much insurance purchasing power they have.